30/12/25, GOLD MEDAL to SILVER PERFORMANCE

167 % that's the record year to date growth of silver on the futures market at Multi Commodity Exchange of India (MCX), up from Rs 95,400 on December 31, 2024, to Rs 2,54,100 on December 29, 2025. The year to date price of silver on the spot market rose from just above $29 on December 24, 2024, to approximately $83 on December 29, 2025.

Silver's dual role as a monetary metal and an industrial asset has been the key factor driving the white metal's record price rise. The central banks, especially the US Fed, lowering interest rates and uncertainty over global tensions, have unprecedently boosted the white metal's value in the market

It is currently one of the third most valued assets in the world after gold and the NVIDIA corporation. In terms of return, silver outperforms gold, which delivered year-to-date returns of just above 75 percent from Rs 78,950 to Rs 1,38,217.

What should investors watch out for in the year 2026? What economic trends will affect silver prices? How could central banks' interest rate decisions and global tensions affect the white metal's value? Which precious metals will outperform — silver or gold? Here's what experts say

What major economic trends do you think will most affect silver prices in 2026?

Renisha Chainani, Head of Research, Augmont, predicts that these three dominant economic trends will shift silver from a purely cyclical asset to a strategic metal, increasing its sensitivity to macro policy, geopolitics, and capital flows.

• The global energy transition: Particularly solar, EVs, and grid investments will keep industrial demand structurally strong.
• Slower global growth with easing monetary policy: This will lower real interest rates, supporting precious metals.
• De-globalisation and trade restrictions: Particularly China's export controls and the US critical-mineral policies will disrupt supply chains.

“Silver's 2025 rally is being shaped by real metal scarcity rather than speculative positioning. Physical deficits, policy-driven supply restrictions, and concentrated inventories are increasingly dictating prices, signalling a durable shift in how the silver market is priced and traded, says Navneet Damani, Head of Research (Commodities), Motilal Oswal Financial Services Ltd.

How might interest rate decisions by central banks influence silver price next year?

Interest rates are critical for silver because it is a non-yielding asset with high beta. If global central banks, especially the Fed, deliver more rate cuts than currently expected, real yields will remain compressed, boosting silver prices. Liquidity injections and balance-sheet flexibility also encourage speculative and ETF inflows.

Chainani believes that central banks increasingly view precious metals as diversification tools amid currency debasement concerns. While gold benefits more directly from reserve buying, silver tends to outperform during easing cycles, as monetary support amplifies both its investment and industrial demand channels.

Which metal do you expect to perform better in 2026—gold or silver—and why?

Silver is likely to outperform gold in percentage terms in 2026, though with higher volatility. Gold will remain a core hedge against debt, currency risk, and geopolitics— offering stability. Silver benefits from a dual engine: the monetary tailwinds, similar to gold, and accelerating industrial demand from solar, electronics, and defense.

“Structural supply deficits and policy-driven supply risks further strengthen silver's case. Historically, in late-cycle easing phases following strong gold rallies, silver tends to play catch-up aggressively, making it the higher-risk, higher-reward metal,” said Chainani.

How could global tensions impact demand for silver in 2026?

Damani believes that the silver market in 2025 has moved beyond a conventional bull cycle and entered a structural phase, driven by prolonged physical supply deficits, inventory depletion, and policy-led supply constraints. The widening disconnect between paper pricing and physical availability highlights deeper stress in global price discovery mechanisms.

He is of the opinion that a key driver behind this transformation has been China's evolving role in the global silver supply chain. As one of the largest refiners and net importers of silver, China witnessed steady drawdowns in physical inventories throughout 2025, pushing stocks to decade-low levels.

“Proposed export licensing requirements starting January 1, 2026, further signal tighter control over outbound flows, restricting the availability of physical metal in global markets at a time when other inventory hubs are already under pressure,” said Damani.

Chainani seconds the thought, adding that “Unlike gold, silver reacts not just to fear but also to policy responses—stimulus, defense spending, and energy security—making it especially sensitive to prolonged global uncertainty.”

What price range do you expect for silver in 2026, and what's your advice to investors?

According to the analyst, the silver price in 2026 may range between $65 and $80 per ounce, with upside risks toward $95–$100 if deficits persist and monetary easing accelerates, while downside appears limited near $55–$60, given structural demand support.

Chainani expects volatility and suggests investors avoid chasing short-term spikes. A staggered investment approach combining SIP-style accumulation on dips with tactical allocations during corrections works best. Silver should be viewed as a medium- to long-term strategic asset, not a short-term trading instrument.

Is there really a shortage of silver right now?

A commodity analyst believes that the silver market faces a genuine structural deficit, not just a logistical issue. For several consecutive years, global demand has exceeded mine supply and recycling.

“While shipping bottlenecks and regional restrictions can temporarily exaggerate tightness, the core problem is insufficient mined supply relative to rising industrial demand, especially from solar.

“Inventories—both exchange-held and above-ground—have been steadily drawn down. Policy actions, such as export controls, worsen availability but are not the root cause; the deficit is fundamentally structural,” said Chainani.

How vulnerable is silver to price spikes since the white metal is mined along with other metals?

Chainani thinks that silver supply responds very slowly to price increases because nearly 70 percent of silver is produced as a by-product of copper, zinc, lead, and gold mining; whereas, production decisions depend on base-metal economics, not silver prices alone.

“Even for primary silver mines, new capacity requires 5–10 years due to permitting, financing, and environmental constraints. Recycling can rise marginally with higher prices, but it cannot close large deficits quickly. This inelastic supply makes silver particularly vulnerable to sharp price spikes during demand surges, said Chainani.

Report by Mr Dipen Pradhan for Network18